Paulo Is Retiring

By: John Hotson,
Business Transition Alliance Co-Founder

Paulo Is Retiring

Paulo is retiring.

I don’t know Paulo but I wonder how his retirement is going.

It’s clear by his advertising that he wasn’t able to sell his business. Nor it seems did he have anyone (staff or family) that he could hand it off to.

It looks like Paulo is one of the growing number of owners who have no other option at the end of their many years of building up a business (48 years in Paulo’s case) than to liquidate what they can, turn out the lights and walk away.

The Problem is Significant

Based on recent research by the Canadian Federation of Independent Business (CFIB), 47 per cent of business owners with a small or mid-size enterprise (SME) intend to exit their business within the next five years, and 72 per cent plan to exit within a decade.

However, the CFIB report states that only eight per cent of owners surveyed had a formal, written succession plan. About 51 per cent didn’t have any plan and 41 per cent had an informal plan.

It appears that Paulo is among the more than 500,000 SME exiting business owners in Canada who haven’t really thought this retirement thing through.

Almost two thirds of the survey respondents said they’d rely on the sale of their business as a source of retirement income. Not only will this be a significant problem for owners like Paulo, but imagine the impact it will have on the 8,000,000 people who currently work in small or mid-size companies in Canada.

SMEs account for about one third of Canada’s GDP. So while this lack of planning is a concern for Paulo and his employees, the stakes are huge for the future competitiveness and prosperity for Canada as a country.

Help is Available

While there is some activity with organizations such as the CFIB who are lobbying the government to make the tax implications on the sale of a business less onerous, this is not enough to change the way owners are currently dealing with the transition of their business.

At the Business Transition Alliance (BTA) we provide consulting services to business owners. Working hands-on, we help develop and implement effective strategies that increase business value, growth and profitability, to help them get their business transition ready. We recognize that the first step involves helping owners realize they have a problem. That is why we have developed the Business Transition 17-point Diagnostic™. We offer this detailed business review free of charge to owners who want to be prepared for the sale or hand-off of their business.

While it may be too late to do anything for Paulo, we know that there are thousands of others out there who we can help get an understanding of what their options are and how to approach the most important aspect of owning a business – exiting successfully.

About John Hotson:

John is a seasoned marketing and communications professional and running addict. He has worked as both a business owner and advisor to owners who are committed to improving the value of their business. John is a principal of Clearwater Corporate Communications and a co-founder of The Business Transition Alliance.

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